The problem is that the maximum voltage you can generate with the maximum burden is \$ 5 \times 0.15 = 0.75 \ \text V_{rms} \$. This means you will be using 42% of the resolution of the CT. This might be a good thing to prevent overvoltage during spikes.

How CT size can be reduced? What parameter do I need to change to make as per size 2 to meet accuracy requirements?

I don't know.

If I select this CT, what will be max current I can supply above without it going to saturation?

Unclear. If you select which CT?

What is effect on burden VA if the current exceeds 100A?

The transformer may saturate so you want to avoid that situation.

How to calculate r1, r2, r3 for this circuit?

We have calculated R1 above.

The R2, R3, C1 network needs to have a low enough impedance to hold the common point steady despite any capacitive coupling to the AC mains. Lower value resistors would help but at the cost of current consumption and time taken to stabilise after power-up.